Global household assets: Dismal growth in 2011

A new Allianz assessment of the assets and debts of private households in over 50 countries reports just 0.6 percent global growth in 2011.

September 18, 2012

This disappointing statistic, published today in the third “Allianz Global Wealth Report”, caps an eleven-year trend of low growth: since 2000, gross per capita financial assets have been growing at an average rate of only 3.1 percent a year.

"It is obvious that uncertainty, low interest rates and the euro crisis have left their mark on asset development", said Michael Heise, chief economist of Allianz SE. "Savers are bearing the brunt of the fact that no real progress has yet been made as far as reorganizing the financial markets and solving the crisis in the eurozone are concerned."

Furthermore, since 2000, the debt growth of private households has outpaced asset growth, with the former at an average of 5.5 percent; the latter, 2.5 percent.

Despite these trends, the study notes an overall increase in debt discipline in 2011, with the global debt increasing at a very low level of 2.2 percent.This is a decrease in the global debt ratio (liabilities as a percentage of global GDP) by 2.5 percentage points, bringing to ratio to 67 percent. To put these numbers in perspective: in the years preceding the financial crisis, global debt growth was often above the 8 percent mark, with the debt ratio peaking at almost 72 percent.

Another trend discussed in the report is the continuing march toward secure investments. Last year, savers increased their bank deposits by more than 6 percent, or around EUR 2 trillion – putting the total proportion of the asset portfolio stored in bank deposits has increased by 5.5 percentage points for a total of 32.8 percent. In contrast, the proportion of securities has dropped by 6.5 percentage points to 34.6 percent.

"This is not entirely unproblematic from a macroeconomic perspective", said Heise. "As far as the savers are concerned, the negative consequences of low interest rates become all the more potent as they flee to supposedly low-risk and short-term investment forms; the meager yields necessitate more savings for old-age. And less long-term capital is available to tackle the challenges that lie ahead of us – from climate change to demographic trends."